A three-member subcommittee agreed to send the Senate Study Bill 1168 to the Senate Transportation Committee after the proposal received widespread support from a broad array of lobby groups representing Iowa businesses, agriculture, and labor unions. A companion bill is pending in the Iowa House.
The measure also includes increases in fees charged for permits needed to operate oversized and overweight vehicles. The Iowa Department of Transportation estimates the additional taxes and fees would generate about $215 million annually to help address the most critical needs for Iowa’s 114,000-mile system of city, county and state roads and bridges.
“We have a huge problem in Iowa,” said Sen. Tod Bowman, D-Maquoketa, chairman of the Senate Transportation Committee. “The effect of this problem is that we have a crumbling infrastructure.”
The subcommittee heard from a parade of witnesses who praised lawmakers for pushing ahead with a bill to raise the gas tax, which hasn’t been increased since 1989, even though costs for road construction projects have increased dramatically since then. The bill’s opponents include Iowans for Tax Relief, Truckstops of Iowa, and Petroleum Marketers and Convenience Stores of Iowa.
Jeff Boeyink, a lobbyist for Community Bankers of Iowa and the Highway 61 Coalition, a road lobby group in eastern Iowa, said better infrastructure is needed to attract new businesses and to accommodate traffic growth. “We have come to the realization that without additional funding some of those projects just aren’t going to be taken care of,” Boeyink said.
“Managing our infrastructure is the basic role of government,” Schwager said. He suggested a fuel tax increase would return Iowa to a “pay as you go system” of financing road projects that would include fuel taxes paid by out-of-state motorists who use Iowa’s highway system.
But officials with the Petroleum Marketers and Convenience Stores of Iowa, which represents more than 2,000 business locations in Iowa, asked lawmakers to consider all options for increasing revenue, not just a gas tax hike.
“We are not here today saying, ‘Don’t do anything,’ ” said Kellie Paschke of the petroleum marketers’ group. But it’s important to recognize that Iowa gasoline retailers are competing with stores in neighboring states and an increase in fuel taxes could hurt Iowa businesses, she explained.
Tom Cope, a lobbyist for the Casey’s General Stores’ retail chain, urged lawmakers not to immediately implement the full tax increase in “one fell swoop,” as has been proposed. He suggested beginning by raising the fuel tax a nickel and following up in January 2016 with another 5 cent fuel tax increase.